When you borrow money and don't pay it back, the creditor may sue you. If the judge rules in the creditor's favor, the creditor can enforce the judgment and garnish your wages to get the money you owe. However, if the creditor violated federal law in getting you to pay back the debt, you may be able to get some or all of the debt erased by making a counterclaim to the creditor's lawsuit. Typically you'll assert your counterclaim in your initial answer to the lawsuit, which must be filed soon after the complaint is received.[1]

Steps

Part 1

Assessing Available Counterclaims

1

Read the complaint and summons. The complaint and summons you received has important information about the lawsuit, including the name of the creditor and how much they claim you owe.[2]

You may not recognize the name of the company that sued you. Sometimes a creditor sells the debt to a collection agency that turns around and sues you for the money.

If the company that sued you was a collection agency, look through the complaint to see if the original creditor is listed.

The complaint also has information you can use to formulate affirmative defenses. For example, if the creditor waited too long to sue you, the statute of limitations may have passed. In most states the creditor has six years or less to sue you.

The summons will include information on where the lawsuit was filed and how long you have to file your answer. Typically you have 20 to 30 days.

2

Gather information. Any documentation you have regarding the debt that is the subject of the lawsuit can help you determine what counterclaims you may be able to assert.[3]

Keep in mind that if you were sued by a collection agency and you don't recognize the debt, you may have a hard time placing it. The easiest way to track the history of the debt is to look at your credit report.

If you have any communications from the creditor or collection agency that you believe support a counterclaim, be sure to preserve them. For example, you might have a voicemail from the collection agency in which the representative threatened you or used profanity in violation of federal law.

3

Evaluate the creditor's statements and behavior. Many counterclaims are based on the creditor's violation of federal law, often related to when, where, or how they contacted you regarding the debt.[4]

The most common counterclaims to creditor lawsuits are for violations of the Fair Debt Collection Practices Act. You can recover up to $1,000 in statutory damages, plus actual damages and attorney's fees, if you can prove the creditor or collection agency violated this law.[5]

A creditor or collection agency violates this law when it lies or misleads you in any attempt to collect the debt. For example, if a representative from the creditor called you and told you if you didn't pay the debt you would go to jail, that would be a violation of the law.[6]

Other examples of illegal deception include pretending to be an attorney, failing to disclose that they are attempting to collect a debt, or claiming that you committed a crime.

Creditors and collection agencies also are prohibited from harassing you in an attempt to collect a debt. Harassment and abuse includes things such as calling you repeatedly and continuously to annoy you, using profanity, or making threats to your physical person, reputation, or property.[7]

4

Consider consulting an attorney. An experienced consumer debt attorney can help you understand your options in fighting the creditor lawsuit.[8]

Attorneys know the courts and the judges, and they also probably are familiar with the other attorneys who represent creditors and collection agencies.

Most of these attorneys offer a free initial consultation, so there's no reason not to talk to someone and at least understand your options, even if you ultimately decide you can't hire an attorney to represent you.

Part 2

Drafting Your Answer

1

Contact the court's clerk. Before you begin drafting your answer, find out what the court's requirements are if you plan to make a counterclaim.[9]

The paperwork you must file to respond to a lawsuit vary among states, and sometimes even among courts within a particular state. Call the clerk's office of the court in which the creditor filed the lawsuit against you.

The clerk should be able to let you know what forms you need and whether you can download them online or pick up copies at the courthouse. However, keep in mind that he or she cannot give you legal advice on your answer or counterclaim.

Ask if you will be responsible for filing fees if your answer includes a counterclaim.[10] If so, find out how much it will be and what you can do to have the fees waived if you can't afford them.

2

Use the proper format. The court may have blank forms that you can use, or you can request copies of answers filed in other lawsuits in the same court to guide you.[11]

The top of the first page of your answer will have the caption, which will look exactly the same on your answer as it does on the creditor's complaint.

Copy the caption and the names identically, even if your name is spelled wrong.

Title your document "Answer," then type a line of introduction. Write something like "Defendant answers the complaint as follows:" then double-space and begin your first numbered paragraph.

Paragraphs should be single-spaced with a double-space between them.

If you're formatting your answer by hand, set it up to print on 8.5 x 11 paper with one-inch margins on all sides.

Some courts use a special "pleading paper" in which each line is numbered. These numbers are separate from your paragraph numbers. If you need to use pleading paper, you typically can find a template in your word processing application.

3

Respond to all of the complaint's allegations. Any allegation not addressed in your answer is treated as though you admitted it.[12][13]

You have the option of admitting or denying an allegation. You also can respond that you lack knowledge or information sufficient to admit or deny. This response is treated by the courts as a denial.

When you deny an allegation, you aren't necessarily saying it isn't true. Rather, you're forcing the creditor to prove it's true. If you admit an allegation, that means the creditor doesn't have to prove it.

You can simply copy the paragraph numbers listed in the complaint and write your answer next to it ("admit," "deny," or "lacks knowledge or information sufficient to admit or deny"). There's no need to write complete sentences or use any other particular legal language.

4

State any affirmative defenses. Affirmative defenses generally are those that you have to prove. With an affirmative defense you essentially are saying that even if you owe the money, there is a good reason the creditor does not have the right to sue you for it.[14][15]

Raise every affirmative defense you think might apply to your case, even if you're not sure. Some affirmative defenses, such as a lack of personal jurisdiction or improper service of process, can't be raised again if they aren't mentioned in the first document you file with the court.

Keep in mind that you don't have to prove your defenses (or counterclaims) when you put them in your answer. You don't necessarily have to prove them at trial either.

You can drop a defense if you decide you don't have enough evidence to support it later on – but generally, it's easier to drop a defense than it is to add a new one.

Not having enough money to pay the debt is not considered a defense.

5

State your counterclaims. Unlike defenses, counterclaims state that the creditor also owes you money for something it has done.[16][17]

The allegations in your counterclaims will be worded similarly to the allegations in the creditor's complaint against you.

Number your paragraphs, and include only one factual statement per paragraph.

Just as with your defenses, you don't have to discuss your evidence or prove your counterclaims at this stage – you simply make the allegations.

Include a dollar amount to which you believe you are entitled. For example, you might write "Plaintiff owes defendant $5,500 in actual and statutory damages because plaintiff violated the Fair Debt Collection Practices Act."

Part 3

Filing Your Answer

1

Sign your answer. You may have to sign your answer in front of the clerk or in the presence of a notary so your signature can be verified.[18]

When you speak with the clerk, he or she typically will tell you if your signature has to be notarized. If it isn't mentioned, ask.

After you've signed your answer, make at least two copies – one for the creditor and one for your own records. The clerk will keep the originals for the court's files.

2

Take your originals and copies to the clerk's office. You must file your answer and any other required documents with the clerk before the deadline listed on your summons.[19]

When you give the clerk your paperwork, he or she will stamp "filed" with the date on each of your documents, then give the copies back to you.

Some courts charge filing fees if your answer includes a counterclaim.[20] Expect those fees to be a few hundred dollars.

If you can't afford to pay the filing fees, ask the clerk for a fee waiver application. You will have to provide details about your income, assets, and monthly expenses.[21]

3

Have the creditor served. After you've filed your answer, you are responsible for ensuring the creditor (through its attorney) receives a copy using the appropriate legal process.[22]

You generally have the choice of either having the answer hand-delivered or mailing it using certified mail with returned receipt requested.

If you have your answer hand-delivered, this can be done by anyone over the age of 18 who is not involved in the case. Typically people pay a fee to a sheriff's deputy or a private process server to do this.

Certified mail usually is the cheapest and easiest way to complete legal service.

After you've received the green card telling you the creditor's attorney accepted the answer, you typically have to file another document with the court providing proof of service. The clerk will have forms for this.

4

Prepare for a response. Since you asserted a counterclaim, the creditor may answer that counterclaim using the same process you did to answer the original complaint.[23][24]

The creditor's answer will be similar to yours, in that the creditor will simply either admit or deny the allegations you stated in your counterclaim.

Expect the creditor to deny most if not all of your allegations. This means you must prove that those things happened.

At trial, you can present evidence including documents and testimony of witnesses to support your counterclaim. You also will have the opportunity to testify yourself.